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Technical Papers
tially larger with higher-quality steel”, says Büchner. More than half of coated at steel prod- ucts are supplied directly to the end-users by steel manufactur- ers, for example. The custom- er-speci c solution and the need for more extensive explanation in sales transactions are appar- ently frequent reasons for this. The analyst concludes that this is both the risk and the opportu- nity for steel traders: “If the steel manufacturers can be matched via smart digital distribution chan- nels, the loss of market share to them could be stopped”. Büchner emphasises that this is a chal- lenge to steel traders: “Failure to tackle this challenge will be pun- ished, however.”
Gisbert Rühl is keen to avoid this punishment. Impressed by the success of the Amazon online marketplace and in search of new business ideas, the CEO of Klöckner & Co., the steel trading company from Duisburg, began by studying current ideas in Silicon Valley and then continued with an investigation of the start-up community in Berlin. Klöck- ner, a company with a tradition that goes back more than one hundred years (it was established in 1906), has been transformed into a digitisation pioneer under Rühl’s leadership. Far away from the steel heartland in the Ruhr region, Rühl set up the creative laboratory kloeckner.i in Berlin in 2014, which has been provid- ing the corporate headquarters in Duisburg with fresh ideas from the trendy German capital since then. The steel trader went online with a new web shop in 2016, for example: a steel trading platform that contains data about suppli- ers and customers. The aluminium business has been expanded at the same time.
Klöckner’s aim in digitising steel and metal distribution is to ini- tiate the end of the linear supply and performance chains that are typical of the industry. It is reported that steel and metal products will be traded via three digital channels to an increasing extent in future: via propriety online shops operated by indi- vidual traders, via industry-spe- ci c, vertical platforms and via cross-sector, horizontal platforms.
What Amazon is for Klöckner CEO Gisbert Rühl is the online car marketplace Mobile.de for Ralf Niemeier. The managing partner of Montanstahl GmbH aims to network steel traders and cus-
tomers neutrally with his open trading platform steel.online that was established in 2015. Steel users can submit price inquir- ies about practically all kinds of steel products to the portal, to which registered traders all over Germany can respond by submit- ting their quotations. Prede ned product categories, geometries and dimensions facilitate input and the search for online quota- tions. Estimation is to be carried out fully automatically in real time in future. A designer could then upload his entire part list to the platform – with prede ned lengths, dimensions and other general conditions – and make a national inquiry. Irrespective of the inquiry volume and complex- ity, he is then supposed to be able to receive his prices within seconds via dynamic automatic estimation modules and place an order with a single click.
Disruption of the old business models
For the steel trading business, which is bound by tradition, dig- itisation is not simply a cultural upheaval – it represents disruption of the existing business models. For decades, steel was bought in large quantities as inexpensively as possible and stored. If prices increased, traders sold with high margins. It is not, however, pos- sible to buy steel cheaply and sell it expensively at some future time any more, since structural excess capacities all over the world – particularly in China – are ood- ing the market and depressing prices. It is no help in the long and medium term either that steel prices increase again temporarily.
Steel trader Klöckner is supplying its approximately 130,000 cus- tomers in 12 countries digitally
ITAtube Journal No2/July 2018
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